Construction struggles as housebuilding takes a tumble

24-May-2018

The
value of new construction contracts in April reached £4.9bn, a decrease
of 6.8% compared to March. The decline coincides with a housebuilding
slump that saw a drop of 15.3% compared to the previous month and a wavering
infrastructure sector that has performed poorly so far in 2018.

The
latest edition of the Economic & Construction Market Review from industry
analysts Barbour ABI highlights levels of construction contract values awarded
across Great Britain. The top project for the month was the ‘M1 Junction 16-13
Smart Motorway upgrade’ valued at £349m, almost four times the value of
the next biggest project.

Across
the rest of the construction industry, medical and health construction posted
the highest monthly value for projects for more than two years, at £229m. Hotel, leisure and sport construction saw an increase in contract
value for the third month in a row. Commercial and retail and education both
saw declines in contract values, down 10 and 9.3% respectively.

Regionally,
London was the region with the largest share of contract awards value in April
with 20.3% of the total, with three of the largest top ten projects across
April. The capital was then followed by the East of England with 16% and the
South East with 11.3%.

Commenting
on the figures, Michael Dall, lead economist at Barbour ABI, said:

“April is a
reminder for the industry that when both infrastructure and in particular
housebuilding falter, construction figures will by far and large decrease.
Other sectors had more of a successful month, such as medical and health
construction, however due to the scale and size of infrastructure and housing
construction, it’s an overwhelming task for other segments of the industry to
make up the sizable difference.”